Airbus A3XX: Developing the Worlds Largest Commerical Jet
Table of Contents
Case Background 2
Assumptions 3
Pricing 4
Payoff Analysis 4
Scenario 1- Airbus No Launch, Boeing No Launch 4
Scenario 2- Airbus No Launch, Boeing Launch 5
Scenario 3-Airbus Launch, Boeing No Launch 5
Scenario 4- Airbus Launch Boeing Launch 5
Risks 6
Recommendation 6
Appendix 7
FIGURE 1- Optimal Prices 7
FIGURE 2- Payoff Matrix 8
FIGURE 3- Trend Analysis: Airbus Launch Boeing Launch 9
FIGURE 4- Trend Analysis: Airbus Launch Boeing No Launch 10
Case Background
Boeing became the world’s top producer in commercial aircraft after World War II and for over 50 years Boeing took control of the industry and led in passenger aircraft assembly. Boeing started out as a monopoly however, eventually turned into a duopoly when Airbus entered the commercial aviation industry. Airbus was a European Aeronautic Defense and Space Company (EADS). In July 2000 Airbus released a $1.6 billion primary public offering. Also, in the same year Airbus accumulated over half of the entire aircraft orders than Boeing.
Airbus has plans to develop the A3XX aircraft which is designed to carry 550 to 990 passengers. After its debut, the A3XX would be the biggest commercial airplane in the aviation market. Boeing has led the market with their 747 series which is the largest aircraft to date. Hearing of Airbus’s plans to develop a large aircraft, Boeing has considered four options. The first option is to manufacture a stretched version of the 747 which would be referred to as the 747X. The second option would be to lower the prices of the existing 747 series. The third option would be to construct a new aircraft that would be able ...